2 posts from June 2007

Yesterday's Linden blog entry over foreign transaction fees seems to have generated a bit of bruhaha, too. Most of the comments seem to be variations on a theme: why does a US company use a UK bank to process its electronic transactions? My initial take on this was to relegate it to the realm of trivialities. Aside from my bank flagging a couple of L$ purchases as possible fraud until I contacted them (they apparently paid Linden, but wanted verification from me), this is not something that even came close to pinging on my radar. I'm more concerned with other issues, such as the problems of voice chat in conjunction with streaming media in a client application that already seems to think that it rules the roost. Talk about bandwidth hogging.... Oh, and don't get me started on the fact that this is going to come as a forced update rather than an optional plug-in.

I'm generally the kind of guy that likes to call a spade a spade, so here it is for what it's worth. Folks, Linden Labs is a business. The objective of any business is to maximize profits for the stockholders. In Linden's case, it is a privately held company (its stock is not traded on public exchanges), but the stockholders still expect a return on their investment. There are basically two components of profit: revenues and expenses. You want the greatest possible profit? Then maximize your revenues and minimize your expenses.

There is only so much a company can do to maximize revenues. Leaving aside shadier enterprises where it's a case of your money or your kneecaps, a company must entice potential customers into parting with their hard-earned lucre. The enticement is always a cost-to-value judgment on the part of the customer, so there is a limit to what a company can charge its customers before they decide that the value they are receiving does not equal or exceed the cost of obtaining it. In the case of LInden Labs, consider how many of their customers they would retain if they did not offer freebie accounts or significantly raised the fees for land owners. That leaves minimizing expenses.

In today's financial environment, a large chunk of financial transactions are processed electronically. Banking institutions are also businesses and they do not do this out of charity; they expect to make money off it. So electronic transactions are accompanied by fees. My bank, for example, charges me a monthly fee to use ATMs. This is in lieu of a per-transaction fee as is the case with other banks. It's not much (a couple or three dollars per month), but that couple or three dollars multiplied by many thousands of customers translates into some serious money. Credit card transactions are also accompanied by fees, but those fees are almost always charged to the merchant. You can still see this in action at those gas stations that offer a lower price to customers who pay cash. The merchant is passing along the cost of the credit card processing fee to the customers who generate the fee.

It has been a few years since I've had to deal with these fees, but American Express used to charge about 4% (and took forever and a day to send the remaining 96%), Discover was about 6%, and I forget what Diners Club/Carte Blanche charged (or whether they are even still around). Visa and Mastercard were handled in much the same way, but the fee was assessed by the merchant's bank on a monthly rather than on a per-batch basis. Now consider a merchant whose business relies almost exclusively on electronic transactions. If a bank comes to you and says that they will knock a half percent (or whatever) off of the processing fees for electronic transactions if you'll give them your business, you'd probably jump at the chance to cut that expense provided the there was no significant difference in any other area. After all, that's a half-percent more going into your pocket. On a single $5 transaction, it's not much, but if your electronic transactions run into the millions of dollars, that's some serious money (OK, it's chump change for the Lord Reverend Gates, but for the rest of us ...).

Linden's statement that they have no control over the fees that your bank charges is absolutely correct. I'm a bit disappointed that it took an off-shore company to come up with the testicular fortitude to make the offer, but I can't fault Linden for taking reasonable steps to reduce the cost of doing business. But any additional fees are an issue between you and your bank. If that significantly impacts the cost-to-value ratio from your perspective, you're welcome to use a different method of payment that doesn't incur the transaction fee.

Disclaimer: I'm not one of Linden's stockholders, I don't work for Linden and I don't know that the foregoing is actually the case. It's reasonable conjecture based upon a single premise: if you want to know why a business does something, follow the money. Linden Labs is a business, after all.

Of all of the more recent posts on the SL blog, none seems to have generated as much comment as this one from yesterday (5/31):

The diversity of things to see and do within Second Life is almost unimaginable, but our community has made it clear to us that certain types of content and activity are simply not acceptable in any form.  Real-life images, avatar portrayals, and other depiction of sexual or lewd acts involving or appearing to involve children or minors; real-life images, avatar portrayals, and other depictions of sexual violence including rape, real-life images, avatar portrayals, and other depictions of extreme or graphic violence, and other broadly offensive content are never allowed or tolerated within Second Life.

Please help us to keep Second Life a safe and welcoming space by continuing to notify Linden Lab about locations in-world that are violating our Community Standards regarding broadly offensive and potentially illegal content.  Our team monitors such notification 24-hours a day, seven-days a week.  Individuals and groups promoting or providing such content and activities will be swiftly met with a variety of sanctions, including termination of accounts, closure of groups, removal of content, and loss of land.  It’s up to all of us to make sure Second Life remains a safe and welcoming haven of creativity and social vision.

Correct me if I'm wrong, but I was sort of under the impression that what avatars did among themselves was pretty much up to them (paragraph 1.2 of the TOS: "Linden Lab generally does not regulate the content of communications between users or users' interactions with the Service. As a result, Linden Lab has very limited control, if any, over the quality, safety, morality, legality, truthfulness or accuracy of various aspects of the Service."). So either the blog entry is fru-fru for the consumption of those who believe anything that they read on the web, or the TOS is a lie.

On the other hand, Linden Labs touts that you retain all rights to any content that you create as your own personal intellectual property, but buried in the TOS is this nice little gem:

You also understand and agree that by submitting your Content to any area of the Service, you automatically grant (or you warrant that the owner of such Content has expressly granted) to Linden Lab and to all other users of the Service a non-exclusive, worldwide, fully paid-up, transferable, irrevocable, royalty-free and perpetual License, under any and all patent rights you may have or obtain with respect to your Content, to use your Content for all purposes within the Service.

Understand that I am not a lawyer (I don't even play one on TV). But my read on this is that anyone can take anything you create and redistribute it as they would like within SL, which seems to go contrary to Linden Labs' assertion that your creations are your creations and you retain all of your IP rights to those creations. The reason why this is important is that in order to report something, someone would have to more-or-less violate your IP rights by providing a copy of whatever the violation was to Linden Labs. Basically, by requesting that community members report violations, Linden Labs requires that the reporting person violate your IP rights. Of course if the Linden Police catch you in the act, you're probably hozed, but since I can't even get them to respond to an email or answer a phone, the odds of that happening appear to be pretty slim. So maybe the blog was fru-fru after all?

By the way, the quotations from the TOS are as of 4:14pm. PDT on 6/1/2007. Since Linden Labs agrees that they can change the TOS at any time and for any reason, you might want to verify them. You can read the TOS here.

The upshot of all of this is that for some reason, the Lindens have decided to become the morality police. Why? I have no idea. I'm not disputing that they have the power to do it (they do control the servers, after all), but I question whether they SHOULD do it. And that's not even getting into what do they really mean when they say "broadly"? Is that a certain percentage of the population? If so, no one ever asked me so the percentage is probably wrong. Is it a certain number? If so, how many individuals out of a population of almost 7 million constitute "broadly"? And remember that I'm a stoic - if I'm offended, it's because I choose to be offended. Is that the fault of the person who offended me or is it my fault for allowing myself to be offended? But I digress.

Consider, for example, that I (an adult) and a significant other (also an adult) decide to engage in a little real life kinkiness (kinky is using a feather; perverted is using the chicken). So I dress up in a sheep suit and the other dresses up as Little Bo Peep (let's have her be a minor so I can kill two or three birds with one example) and we go to town. Have any laws been violated? I mean it's not like anyone's doing it with a real sheep or with a real minor. And if we were to do this in SL, it's all just cartoons, so it's not like it's even real people doing it. So who cares?

Apparently the Lindens do. Why? According to the TOS, everyone in SL is an adult since you must be over 18 to join. To steal an idea from elsewhere ("Demolition Man," I think), if I want to paint myself purple and run naked down the street, I should be able to do that. Not because I really want to, but because to tell me that I can't is to limit the means by which I may express myself. Well, express myself within limits, of course. Second Life has a rating system. At the moment it's PG (good for just about everyone) and Mature (you'll probably want to keep the kiddies away, but they aren't supposed to be here anyway). Running naked down the street would probably fall under "Mature" so I'd want to confine my purple nudity to one of those areas.

Supposedly they are adding an "Adult" classification so that we can relegate all of the unbridled sex to somewhere inaccessible to the freebie accounts unless they pony up some ID (Officer: "got any ID?" Driver: "bout whut?"). So if someone is going to be offended by something that they see or hear in a Mature area, it begs the question: what were you doing there in the first place? It's not like anyone stuck a gun to your head and made you go. And even if they did stick a gun to your head, who cares? Your avatar is indestructible. People can shoot nuclear missiles at you all day long and nothing will happen except some flashing lights on the screen and maybe a few sound effects. But you're going to get upset over cartoon people who want to dress up and play? Perhaps you should get a first life before getting a Second Life.

As far as the rape statement, you should keep in mind that default avatars are not equipped for sex. Second, no one can animate your avatar without your consent. Trap you and knock you around? Yes. But no one except you can decide what your avatar does. So if you happen to see a rape in SL, it's happening between consenting adults who have modified their avatars to be able to do that. It's none of your business in that case unless it's happening in a PG area. For the record, I'd like to point out that after many conversations with many female friends over the years, women (in general) do not have a "rape fantasy". Many have a "forcible seduction" fantasy, but note that it a seduction fantasy where consent is initially withheld, but eventually given. I don't know a single female who fantasizes about having some slimebag shoving a gun in her face and threatening to splatter her brains while he gets his rocks off. If you do, you might want to urge her to seek counseling. If you know such a slimebag, call the cops (the real ones).

The funny part of all of this is that I've wandered far and wide and haven't come across any unbridled sex that would need to be corralled. Scantily clad avatars, sure. Strippers and hookers? Yep. Strange things in shops, you bet. Role players who are into things that I'm not? Of course. Hot, sweaty, monkey-love? Nope. Maybe I need to look harder.